Turkish Government "Goes For Gold"; Seeks To "Transfer" Private Gold Holdings Into Bank System

Tyler Durden's picture




 

Gold may not be 'money' to the Chairman, but it sure is to Turkey. The WSJ reports that "The Turkish government, facing a bloated current-account deficit that threatens to derail the country's rapid expansion, is trying to persuade Turks to transfer their vast personal holdings of gold into the country's banking system." The reason: "The push to tap into the individual gold reserves—the traditional form of savings here—is part of Ankara's efforts to reduce a finance gap that is currently about 10% of gross domestic product." In other words, "sequester" the population's hard assets (politely of course), and convert these to paper to fund the country's creditors, both foreign and domestic. Mostly foreign. In other words, Southeast Europe is slowing becoming the staging ground for the 21st century equivalent of Executive Order 6102, where first Greek, and now Turkish gold, is about to be pulled from point A to point B, where point B is some top secret vault deep under London.

How will Turkey spin gold confiscation in the politest of ways? The WSJ has details:

Government officials say the banking regulator will soon publish a plan to boost incentives for consumers to park their household wealth inside the financial system. Banking executives said they are considering new interest-yielding gold-deposit accounts that would allow savers to withdraw gold bars from specially designed automated teller machines.

 

The moves come after the central bank in November announced that lenders could hold up to 10% of their local-currency reserves in gold, in part to tempt Turkey's gold hoarders to deposit their jewelry, coins or bullion at banks.

 

Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against the economic volatility that has periodically hit Turkey in recent decades.

 

The effort is one front in a broader battle to encourage more savings while curbing the ballooning current-account deficit—a pressure point many investors fear could upend a fast-growing economy, estimated to have expanded more than 8% last year. Turkey's current-account gap has expanded faster than expected in recent weeks amid a surge in oil prices and data showing unexpectedly high consumer demand.

We wish them luck:

For some Turks, the government will have to unveil a lot more sweeteners before they part with the family gold. 

Because what may not be apparent to a Princeton Ph.D., is more than obvious to a 70 year old housewife in Istanbul:

"I'm keen to save, so keeping gold at home is easy for me; there is no complicated procedure," said Ayten Altin, a 70-year-old housewife in Istanbul. "In an emergency, I can convert it to cash and I don't have to wait for the bank to say the asset has matured."

Q.E.D.

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Thu, 03/22/2012 - 09:18 | 2280050 Harlequin001
Harlequin001's picture

You got that right, London it is, not New York...

Old money talks...

The question is, why would anybody want to deposit their gold bullion in a bank?

Surely a safe deposit or vault is preferable...

Thu, 03/22/2012 - 09:23 | 2280074 jus_lite_reading
jus_lite_reading's picture

How much gold is still in Ft Knox? The whole world wants their gold back...

Thu, 03/22/2012 - 09:28 | 2280101 Pladizow
Pladizow's picture

A fool and their "money" are soon parted!

Thu, 03/22/2012 - 09:31 | 2280108 MillionDollarBonus_
MillionDollarBonus_'s picture

This is a smart move by the Turkish government. It is a crime against humanity to hoard gold and silver when speculators have driven these metals to absurdly high prices. By hoarding metals instead of investing in the economy, goldbugs and silverbugs are impeding economic growth and inhibiting job creation. The Turkish government and banks can now rehypothicate this gold to facilitate credit expansion as a form of monetary stimulus, which helps everybody, not just a few greedy goldbugs.

Thu, 03/22/2012 - 09:33 | 2280123 Pladizow
Pladizow's picture

Attention American Citizens:

O'Bummer wants you to trade in your gold, guns and freedom for a cheeseburger, prozac and free cable!

 

Thu, 03/22/2012 - 09:36 | 2280131 HungrySeagull
HungrySeagull's picture

Hay-ul no. Come and get it.

Thu, 03/22/2012 - 09:45 | 2280163 Miles Ahead
Miles Ahead's picture

You mean, "come 'n git it!"

Thu, 03/22/2012 - 10:04 | 2280241 MaggieL
MaggieL's picture

Actually, we mean molon labe

Thu, 03/22/2012 - 10:22 | 2280295 Oh regional Indian
Oh regional Indian's picture

Was thinking of what would happen if they tried it here in India.

And then I realized they already did!!! Gold Loan companies, euphamistically called Non Banking Finaicial Corporations, are mopping it up as Indian's find it harder and harder to pay for that debt driven holiday/car/flat/tractor they could not really afford, especially that floating rate loan they never understood in the first place.

Interesting that they are trying to do it openly in Turkey. 

ori

if-i-ever-saw-a-sign/

Thu, 03/22/2012 - 10:25 | 2280310 Pladizow
Pladizow's picture

Still on it, huh!

Thu, 03/22/2012 - 10:47 | 2280329 Oh regional Indian
Oh regional Indian's picture

On what Plad, Gold Loan Companies? I read about it in the news every day. I see things happeningall around me. I speak with common folk. My auto-rickshaw driver had quite a tale to tell today. All about debt.

What are you talking about? And if it is the above, what are you basing your opinion on?

ori

Thu, 03/22/2012 - 11:34 | 2280520 flacon
flacon's picture

I always had the sneaky suspicion that when it comes time for us to unload our gold and exchange it for other assets that we would not be taxed. 

Thu, 03/22/2012 - 10:37 | 2280341 DoChenRollingBearing
DoChenRollingBearing's picture

@ ORI + 1

And I was thinking of what would happen if they tried it here (in the USA).  I would venture to say that almost all of us 1% (those of us who hold physical gold, NOT, the other 1%...) are gun holders as well.

Molon labe, bitchez!

Thu, 03/22/2012 - 10:46 | 2280366 Oh regional Indian
Oh regional Indian's picture

DCRB, here, in India, the rate (!) at which people are getting sucked into debt for a whole bunch of "desires", life's little extras at crazy interest rates (Auto loan is 10-16%, depending as an example).... And because there is so much more "stuff" out there, re-sale prices are terrible. 

All in all, it's not going to end well here, there is no way the PTB do not have a plan for one-sixth of the world's population, especially when it is the largest collective gold-holder on the planet. 

To the PTB, India is probably an above ground gold-mine, being prepped for a little vaccum-cleaner action via Gold Loan Companies.

ori

Thu, 03/22/2012 - 11:52 | 2280563 juggalo1
juggalo1's picture

10 or 16% interest rates are not so bad when inflation is running 6-8%

Thu, 03/22/2012 - 12:17 | 2280638 Oh regional Indian
Oh regional Indian's picture

But what if real inflation is closer to 20 % in essentials and 2% in crap?

ori

Thu, 03/22/2012 - 16:40 | 2281770 akak
akak's picture

Bingo!

There is no "if" about it.

Thu, 03/22/2012 - 10:38 | 2280348 Gully Foyle
Gully Foyle's picture

Oh regional Indian

Watch the most recent South Park. Features conning elderly out of their money, cash for gold, home shopping networks, and gold jewelry ties to India.

Interesting how all the dots connect in a circle jerk.

Thu, 03/22/2012 - 10:46 | 2280371 Oh regional Indian
Oh regional Indian's picture

Sly Social Engineering Gully. So many tools.

ori

Thu, 03/22/2012 - 12:23 | 2280653 MeelionDollerBogus
MeelionDollerBogus's picture

LOL whoever made the rhyme did the crime :D

Thu, 03/22/2012 - 14:48 | 2281287 Jacks Nipple
Jacks Nipple's picture

Those guys are brilliant.

Thu, 03/22/2012 - 11:34 | 2280522 MeelionDollerBogus
MeelionDollerBogus's picture

http://youtu.be/4TlPo0yCSa4

without Southpark we wouldn't have this gem!

Moo moo MOO. Moo-moo.

Thu, 03/22/2012 - 10:17 | 2280279 SubjectivObject
SubjectivObject's picture

zackly

Thu, 03/22/2012 - 09:45 | 2280164 redpill
redpill's picture

"Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against the economic volatility that has periodically hit Turkey in recent decades."

Obviously, government is supposed to act in the interest of the people, but the Turkish government has shown that is a cheap façade. The people are currently acting WISELY and protecting their savings, but the government wants them instead to act foolishly and risk their financial security because the government is too inept to manage their own finances. If that isn't the perfect example of why, in the end, it is always you versus the state, I don't know what is. I hope the Turkish people tell them to fuck off.

Thu, 03/22/2012 - 10:59 | 2280396 duo
duo's picture

keeping money in their banking system is not in one's economic best interest.  Kind of like buying a GM car.

Thu, 03/22/2012 - 11:45 | 2280547 fockewulf190
fockewulf190's picture

The Turkish Central Bank has a knack for chopping zeros off its currency denomination from time to time. You can only ream the public so many times until they show you the bottom of their shoes.

Thu, 03/22/2012 - 11:59 | 2280590 tabasco71
tabasco71's picture

How much longer before the US and the UK and EZ issue polite requests similar to this I wonder?

Thu, 03/22/2012 - 19:51 | 2282133 Bicycle Repairman
Bicycle Repairman's picture

"Economists say the policy shift is designed to change Turks' historic preference for storing a high percentage of personal wealth outside the banking system as a way to protect themselves against THEFT  that has periodically hit Turkey in recent decades."

All fixed.

Thu, 03/22/2012 - 09:45 | 2280166 I am more equal...
I am more equal than others's picture

Gold is going to experience Midnight Express....the citizens are picking up the soap in the shower while the goberment is beating the soles of their feet.  We will take that (oh yeah, we have an army to help use) and give you paper (used toilet paper) - yes, Kevin Bacon, you may have another ...

 

Thu, 03/22/2012 - 12:03 | 2280604 LowProfile
LowProfile's picture

I see many boating accidents on the horizon...

Thu, 03/22/2012 - 10:02 | 2280233 rufusbird
rufusbird's picture

I hear some guy name Corzine was hired to run the books in the back office operations division...

Thu, 03/22/2012 - 10:57 | 2280278 poor fella
poor fella's picture

The banks are going to make loans against these holdings correct? So they may not care if it's costume jewelry covered in 20 carat diamonds? Inflated interests payments (still near zero) is nothing compared to the leverage the banks could create. What were the 'assets' the ECB just allowed on their balance sheets?

Are the banks going to have assayers determining values? "The New Tungstun: Not just for fishing lures!"

Thu, 03/22/2012 - 09:44 | 2280160 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Deal!  Sorry, that was the prozac talking.

Thu, 03/22/2012 - 10:40 | 2280355 Gully Foyle
Gully Foyle's picture

Pladizow

Maybe you should go back on the Prozac.

Thu, 03/22/2012 - 09:54 | 2280202 rehypothecator
rehypothecator's picture

I'm finally starting to see through the ignorance and contempt your posts have, and instead actually see the sarcastic humor.  It's been a long, slow and difficult process, however.

Thu, 03/22/2012 - 10:26 | 2280315 poor fella
poor fella's picture

MDB's best post! I'm almost to the point you've reached.

He's stepping out of the closet - about right here   /s a r _

Thu, 03/22/2012 - 10:51 | 2280380 CIABS
CIABS's picture

Yes, MDB is becoming comical now.

Thu, 03/22/2012 - 11:23 | 2280482 MeelionDollerBogus
MeelionDollerBogus's picture

I'm surprised he didn't say that gold has no value to back it unlike bonds and dollars that have the full faith & credit of the US government :D

Thu, 03/22/2012 - 13:10 | 2280841 Catch-22
Catch-22's picture

he has indeed refined his “craft” very nicely

 

Thu, 03/22/2012 - 10:11 | 2280266 BKbroiler
BKbroiler's picture

MDB - never stop trolling, seriously.  You're my favorite one.

Thu, 03/22/2012 - 10:33 | 2280323 Monedas
Monedas's picture

Million Dollar Boner !   I still give you the benefit of the doubt.....you're pulling our chains and....strings ? Ladies don't have chains to pull !         Gold has no place to hide.....if you hoard it, you retire it from the bidding of the marketplace and enhance the bidding power of all other barter and currency.....in the most egalitarian distribution imaginable !  It's like when you don't vote.....you distribute your voting power equally to all those who do vote !  It is impossible to not contribute....even if you hoard and don't vote !  Monedas   2012   Maybe we could pimp (hypothecate) your ass and use the proceeds to pay down Greek debt ? 

Thu, 03/22/2012 - 10:38 | 2280349 mc_LDN
mc_LDN's picture

Crackerjack.

Thu, 03/22/2012 - 11:21 | 2280476 MeelionDollerBogus
MeelionDollerBogus's picture

duuuude

you already said that gold & silver have no value

how can it be a crime against anyone to hold onto something you say has no value? Inconsistent-Troll is Inconsistent.

How can anything impede economic growth if it's useless as you say so often? You have no value for gold & silver, you say no one else does so let people hold onto these things you say are useless.

And again I say, no need to rehypothecate gold & silver materials into fraudulent shared holdings where no one can make their claim. Do it to the existing fraudulent bonds & currency paper, issue more of those, don't worry about silly things like land, gold and oil.

You hit -68. Well, it's a tad better but I've seen -390 for you before. Keep trying, mini-B

Thu, 03/22/2012 - 11:51 | 2280559 juggalo1
juggalo1's picture

It impedes economic growth by driving investment into gold and silver mining which are economically unproductive ventures.

Thu, 03/22/2012 - 15:32 | 2281470 MeelionDollerBogus
MeelionDollerBogus's picture

Of course because it would make much more sense to leverage all gold & silver 100 to 1 then rehypothecate that into corporate bonds to mine for treasuries at the Fed!

Thu, 03/22/2012 - 11:28 | 2280508 juggalo1
juggalo1's picture

Usually you are pretty funny, but this is not sensible on any front.

Thu, 03/22/2012 - 11:40 | 2280532 Raymont
Raymont's picture

Long live MillionDollarTroll_.

Thu, 03/22/2012 - 13:11 | 2280843 cranky-old-geezer
cranky-old-geezer's picture

 

 

By hoarding metals instead of investing in the economy, goldbugs and silverbugs are impeding economic growth and inhibiting job creation.

Hmmmmm..... what about those hundreds of billions of "excess reserve" dollars Wall Street banks have parked in Fed accounts? 

You know, money they got when they sold all those worthless MBS to the Fed (at full original value).

Hundreds of billions of "excess reserve" dollars parked in Fed accounts for 3 years now?  Sounds like hoarding to me.

Of course I know it's satire MDB.  Nobody could be so stupid and gullible and brainwashed to actually believe what you say.

Thu, 03/22/2012 - 13:37 | 2280977 MagicHandPuppet
MagicHandPuppet's picture

The crime against humanity is the poisonous rubbish coming from you, dip shit

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